Adjustments (Adjustments never involve cash or GST):
a. Physical Stock-take of office supplies revealed supplies used for June - $620.00.
b. Calculate and record the adjusting entry for the Wages Payable for the month of June that have not as yet been paid.
c. Insurance - the $2,000.00 (previously paid) is now fully used (expired) and 15 days coverage from the recent insurance policy paid also needs to be expensed. For the recently paid amount simply divide by 12 months and then by 2.
d. Calculate and record the adjusting entry for rent for the month of June.
e. Sun Radio advertising for the entire month of June was carried out and the amount for one month should now be expensed.
f. Calculate the amount for Provision of Doubtful Debts and make the necessary journal entry.
g. Calculate the amounts for the depreciation of the non-current assets and make the necessary journal entries - there are 3 depreciation expense accounts so do a separate journal entry for depreciation of each asset.
h. Adjust for the prepaid Phone & Internet rental paid on the 28th (exclude GST).
i. Based on the average use of electricity for the year and the seasonal usage an amount of $1,498 is estimated for June.
PART A - ACCOUNTING REQUIREMENTS - FOR JUNE
1. Record all the necessary entries in the relevant journals and ledgers, excluding balance day adjustments, to maintain proper accounting records for June. Please note that you may need to create new accounts using subsequent account numbers where necessary.
2. Prepare an Unadjusted Trial Balance on the worksheet provided.
3. Record all the necessary balance day adjustments for June in the General Journal and post to the General Ledger accounts.
4. Prepare an Adjusted Trial Balance on the Worksheet provided and complete the worksheet.
5. Record all closing entries in the General Journal,however, do notpost them to the relevant general ledger accountsuntil you have checked that the Trial Balance is correct.
6. Prepare the Income Statement (using the Functional format) for the year ending 30 June2016.
7. Prepare the Statement of Changes in Equity for the year ending 30 June 2016.
8. Prepare the classified Balance Sheet as at 30 June2016.
9. Prepare the Cash Flows (Simplified Statement) for the month ending 30 June 2016.
a. Note: without the balances as at the 1st July 2015 (or alternatively the Cash Receipts and Cash Payments Journals for the entire year) it is not possible to calculate the proper Statement of Cash Flows!
b. A simplified approach has been provided in the Excel template!
PART B - CRITICAL ANALYSES
You are required to complete the questions that are in the special Test of Knowledge section on Blackboard for the proportion of marks from the major assignment. The questions are pertinent to your completion of the learning from the major assignment and from the application of basic accounting knowledge as well as critical thinking skills.
1. Check that all the transactions have been entered in the appropriate Special Journals.
a. Tick each transaction on your word document and you should have the initials of the journal it was posted to.
2. Check that the Total Debits equals the Total Credits for each Special Journal.
a. There is already a total figure provided in each special journal.
3. Check the Live Trial Balance - the Total Debit amount should equal the Total Credit amount.
4. Check the Balances of the Subsidiary Ledgers agrees with the Control Account in the General Ledger (eg Accounts Receivable, Accounts Payable, Inventory).
a. There is already a comparison in the Subsidiary Ledger worksheets
b. The 3 subsidiary ledgers are - Accounts Receivable; Accounts Payable; and Inventory
5. Do the Bank Reconciliation and record any additional amounts in the Cash Payments or Cash Receipts Journals (as may be necessary)!
a. There may be bank fees, dishonoured cheques, interest, error in amounts.
b. You MUST do the Bank Reconciliation before you can do the end of the Month or the end of the Financial Year!
6. NOW - check that the Live Trial Balance is still in balance!
7. At this point Copy the Debit and Credit Columns from the Live Trial Balance and
a. Paste them to the Unadjusted Trial Balance worksheet (paste as values only)
i. Check that the Totals are equal and that they are the same as the Live Trial Balance you just copied from.
b. Paste them to the 10 Column Worksheet Unadjusted columns (paste values only)
i. Check that the Totals are equal and that they are the same as the Live Trial Balance you just copied from.
8. In the 10 Column Worksheet enter the adjustments against the accounts that require adjustments to be made.
a. You will find the list of adjustments is given at the end of the Month's transactions
b. You will have to calculate the adjustment amounts
c. Check that the Total Debit amount equals the Total Credit amount of the Adjustments Columns.
i. You should note in the extra columns provided the alphabetical character that each adjustment relates to (eg a, b, c, etc)
d. Check that the adjustments have been carried across to the Adjusted Trial Balance Columns of the 10 Column Worksheet and that the Total Debit amount equals the Total Credit amount!
e. These are the Adjustments and the amounts you need to complete the General Journal Adjusting Entries!
9. NOW - you can go to the General Journal and enter the account names and the amounts for each of the adjusting entries.
a. Note as you do this each adjusting entry will change the General Ledger and the Totals of the Live Trial Balance.
b. When you have finished all the adjusting entries in the General Journal check the new Total Debit and Total Credit amounts are equal and that they are also the same as the amounts you have in the 10 Column Worksheet!
Attachment:- RTK Buderim Mowers and Student Template.rar